Ripple's legal battle with the U.S. Securities and Exchange Commission (SEC) is coming to a close. The company has agreed to drop its appeal, officially concluding the lawsuit that began in December 2020.
The End of a Prolonged Legal Battle
Ripple has agreed to pay $50 million of the original $125 million fine imposed by the SEC, while $75 million will be refunded to the company. The SEC will also request that the court lift the previously imposed injunction on Ripple. Final legal formalities are still pending. This settlement marks the closure of one of the most significant regulatory confrontations in crypto history. The case was pivotal in determining whether digital assets like XRP should be classified as securities under U.S. law.
Reasons Behind SEC's Withdrawal
The SEC's decision to drop its appeal signals a shift in its enforcement strategy. Since Gary Gensler resigned as SEC Chair in January, the agency has reversed several enforcement actions against crypto firms. Ripple CEO Brad Garlinghouse had hinted last week that the SEC might end its appeal, which has now been confirmed. Some industry insiders believe the regulator realizes that lawsuits alone will not provide the necessary regulatory clarity for crypto assets.
Impact on Future Crypto Regulation
Despite the positive news, XRP's price remained largely unchanged. Analysts believe the market had already accounted for a favorable outcome for Ripple given the prolonged nature of the case. The Ripple vs. SEC lawsuit has been one of the most important legal battles in the crypto space. Its resolution could influence how regulators approach other cryptocurrencies in the future. The case also highlighted the need for clear crypto regulations in the U.S.
The resolution of the Ripple and SEC lawsuit could significantly impact future crypto regulation and possibly prompt Congress to establish clearer guidelines for digital assets.
